FSS Consults on Rules Related to Short-Term STC Securitizations
FSS published a notice with proposal regarding the enactment and revision of its regulation related to the capital treatment for short-term simple, transparent, and comparable (STC) securitizations. The consultation period ended on September 18, 2019.
The purpose of the stipulated provisions and revisions is to:
- Encourage a bank to strengthen responsible autonomous risk management through the approval, post-management procedures, and improvement of risk assessment criteria under the Internal Grade Act, which applies to the release of risk-weighted assets.
- Rationalize capital regulations, such as allowing credit risk reduction for unrecovered domestic bonds secured with superior bonds
- Reflect the criteria for the handling of regulatory capital for the BCBS-published standard on capital treatment for short-term STC securitizations
- Low risk-weight application for exposure, in which the underlying asset is superior and homogeneous and the relevant information is transparent and consistently managed and consistently.
Comment Due Date: September 18, 2019
Keywords: Asia Pacific, Korea, Banking, Securitization Framework, Regulatory Capital, STC Securitization, Risk-Weighted Assets, FSS
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